02/09/2000 05:10 PM House EDT

HB 265 - ALASKA REGIONAL ECONOMIC AID PROGRAM                                                                                   
                                                                                                                                
Number 0065                                                                                                                     
                                                                                                                                
CHAIR PHILLIPS announced the first order of business as House Bill                                                              
No. 265, "An Act extending the termination date of the Alaska                                                                   
regional economic assistance program; and providing for an                                                                      
effective date."                                                                                                                
                                                                                                                                
Number 0095                                                                                                                     
                                                                                                                                
REPRESENTATIVE ALAN AUSTERMAN, Alaska State Legislature, sponsor of                                                             
HB 265, came forward to present it.  In 1988 the ARDOR (Alaska                                                                  
Regional Development Organizations) program was formed which helped                                                             
fund some of the economic development in the rural areas of Alaska.                                                             
When he served on the Kodiak Island Borough assembly there was talk                                                             
about how to get economic development going.  The Southwest                                                                     
Municipal Conference was formed and several regional conferences                                                                
have been formed around the state of Alaska.  Now there are 13                                                                  
regional development organizations.  The money placed into the                                                                  
ARDOR program is seed money which when matched has been able to                                                                 
bring in about $3.5 million a year.  This bill extends the sunset                                                               
date on the ARDOR program.                                                                                                      
                                                                                                                                
Number 0302                                                                                                                     
                                                                                                                                
GARY STEVENS testified from Kodiak via teleconference.  He stated                                                               
that Kodiak is one of the ARDOR through the Southwest Municipal                                                                 
Conference.  The Kodiak Island Borough and the Alaska Municipal                                                                 
League have been very supportive of the ARDOR program.  The ARDOR                                                               
program has had an impact on Southwest Alaska, and he hopes the                                                                 
committee will consider reauthorizing it.  It has been used to help                                                             
people get businesses started by helping them in the planning                                                                   
stages and giving them assistance in creating promotional material.                                                             
The ARDOR program has provided a tremendous advantage, and if it is                                                             
continued, it will continue to have an impact on his part of the                                                                
state as well as the other areas where ARDOR exist.  He encouraged                                                              
the committee to consider this.                                                                                                 
                                                                                                                                
Number 0423                                                                                                                     
                                                                                                                                
CHARLES PARKER, Executive Director, Mat-Su [Matanuska-Susitna]                                                                  
Resource Conservation and Development Council (RCDC), testified                                                                 
from the Mat-Su LIO [Legislative Information Office] via                                                                        
teleconference.  In his experience in development in rural Alaska,                                                              
there is no comparison for the ARDOR program.  With very little                                                                 
state money, the ARDOR program has accomplished a great deal of                                                                 
work.  Statewide they have managed to leverage over $5 in private                                                               
and federal money for every one dollar invested by the state for                                                                
local development projects just in the last two years.  In the                                                                  
Mat-Su Valley the RCDC also managed accounts for numerous community                                                             
organizations many of which may not have been able to accomplish                                                                
their goals without the specific help.  The managed accounts have                                                               
totaled over $300,000 in the past two years.  These figures, while                                                              
actually substantial, are actually very conservative as they also                                                               
provide technical assistance in a lot of development projects in                                                                
the region which brings in more private and federal funds which is                                                              
almost impossible to quantify.                                                                                                  
                                                                                                                                
MR. PARKER indicated the financial impact of the ARDOR activities                                                               
in the long-term is also substantial.  As the ARDOR work to create                                                              
jobs, it reduces unemployment and decreases the burden on public                                                                
assistance programs.  As the local economy and the quality of life                                                              
are improved, a community's dependency on direct state and federal                                                              
services is reduced.  Many of the regional development                                                                          
organizations would not survive without the support of the ARDOR                                                                
program, and their loss would be felt for many years to come.  He                                                               
urged the committee to pass HB 265 and fully fund the ARDOR                                                                     
program.                                                                                                                        
                                                                                                                                
CHAIR PHILLIPS noted in last year's budget there was $620,000 in                                                                
grant money available to the 13 different ARDOR and that leveraged                                                              
about $3.5 million.  She asked Mr. Parker if the money is program                                                               
specific or is there overhead built into the grant.                                                                             
                                                                                                                                
MR. PARKER said the grants they receive from the state is for                                                                   
direct program services.  That pays for staff time and travel out                                                               
to do the work and set up meetings.                                                                                             
                                                                                                                                
PAT POLAND, Director, Central Office, Municipal & Regional                                                                      
Assistance Division, Department of Community & Economic Development                                                             
(DCED), testified from Anchorage via teleconference.  The DCED                                                                  
serves as administrator of the ARDOR grants.  He explained there is                                                             
$650,000 that has historically gone for the ARDOR program, $30,000                                                              
of which has been used for the administrative overhead, and the                                                                 
remainder of the $620,000 goes as grants to the ARDOR themselves.                                                               
He expressed support by DCED for the ARDOR program.                                                                             
                                                                                                                                
FRANK HOMAN, Executive Director, Southeast Conference, came forward                                                             
to testify.  He agreed with the other members of the ARDOR who                                                                  
testified that it has been a very successful program.  It has                                                                   
helped Southeast to expand its services over the years.  When the                                                               
program first started in 1988, there was not a permanent office and                                                             
it was an informal association.  Although the Southeast Conference                                                              
has been around for years since statehood when they came together                                                               
to promote the Alaska Marine Highway System, it was never fully                                                                 
staffed or able to take care of a lot of the economic development                                                               
promotion that needed to be done in the region.  Since the ARDOR                                                                
grants became available, it has been staffed with a full-time                                                                   
position and has been able to leverage a lot of outside funds for                                                               
the region.                                                                                                                     
                                                                                                                                
MR. HOMAN said the Southeast Conference has also been designated as                                                             
a Resource Conservation and Development (RC&D) district which                                                                   
provided a federal staff employee that works with the Southeast                                                                 
Conference and provided access to additional federal funds that                                                                 
help to fund specific programs and projects.  One of the benefits                                                               
of the ARDOR program is that it forces the region to come to a                                                                  
consensus on projects that it would like to work on.  The                                                                       
membership of the Southeast Conference consists of almost all the                                                               
communities of Southeast Alaska so it represents the majority of                                                                
the population.  The Southeast Conference works on region-wide                                                                  
transportation issues, power issues, solid waste, so it has been a                                                              
catalyst to help bring the region together.  For that reason it is                                                              
a very useful program.                                                                                                          
                                                                                                                                
CHAIR PHILLIPS referred to the fiscal note.  The $650,000 comes to                                                              
the DCED via a Reimbursable Services Agreement (RSA) from the                                                                   
Alaska Industrial Development and Export Authority.                                                                             
                                                                                                                                
REPRESENTATIVE BARNES pointed out that it cannot be a zero fiscal                                                               
note.  There is an explanation at the bottom that DCED gets the                                                                 
money from a RSA and then awards $620,000 in grants and $30,000 for                                                             
personal services, and it shows a zero above.                                                                                   
                                                                                                                                
REPRESENTATIVE AUSTERMAN agreed that is correct.  It is a $650,00                                                               
general fund appropriation.                                                                                                     
                                                                                                                                
REPRESENTATIVE BARNES stated they will need a revised fiscal note                                                               
to be presented to the next committee.                                                                                          
                                                                                                                                
Number 1077                                                                                                                     
                                                                                                                                
REPRESENTATIVE BARNES made a motion to move HB 265 from the                                                                     
committee with individual recommendations with a revised fiscal                                                                 
note to reflect the analysis at the bottom of the page of the                                                                   
fiscal note and asked for unanimous consent.  There being no                                                                    
objection, HB 265 moved from the House Special Committee on                                                                     
Economic Development and Tourism.